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Amazon To Sell Wine Online

by Tim Elliott on September 11, 2008

As reported by the Wall Street Journal and Reuters, Amazon.com will begin to sell wine in a just few weeks here in the U.S. The announcement came from The Napa Valley Vintners association and not directly from Amazon. Also reported was that New Vine Logisitics will be Amazon’s shipping partner when they go live.

Rumors have been circulating for some time that Amazon would enter the market but most observers thought they would concentrate on high volume brands. But the Amazon head wine buyer was on the floor checking out wines at the recent Family Winemakers of California and I have spoken with several smaller wineries who have been in discussions with them.

As I posted back in March, I think his is the most signifiant development in wine distribution since the repeal of Prohibition in 1933. And Amazon’s actions in the past 6 months have validated my hypothesis that medium to small wineries are their target. Their decision to work with regional wine associations is a good one from an industry relations, recruitment and PR point of view. I don’t think it was an accident the announcement came from the Napa Valley Vintners and think we’ll see announcements from other winery associations before Amazon formally launches their wine business later this month or in early October.

This is a great development for both wineries looking for online distribution and for consumers looking for small production, artisan wines. I expect the shipping fees to be reasonable like Amazon does for all their other products but their Prime service will be a must for serious wine lovers. For $79 a year, you get free shipping on all purchases with second day delivery. No word on if that speed will be honored for wine but if it’s just free ground shipping for wine, that will be huge for sales. With increasing fuel costs, shipping is becoming a real problem for wineries as it adds significantly to their customer price. If this is a non-issue, then wineries stand to benefit greatly from what Amazon if offering.

This is not good news for other online wine retailers who do not have the deep pockets to cover the significant shipping costs or the economies of scale that Amazon has. But I still think there will be a place for niche e-tailers like domaine547 and wine marketing sites like woot and The Wine Spies.

I think this is the biggest wine story of the year and will be blogging about what this means for wine marketing over at my company blog.

Cheers to Amazon and welcome to the wine business.

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